On a roll: Expanded Kruger mill keeps growing

The Memphis and Shelby County Industrial Development Board has approved a $45.4 million property tax break to induce Kruger Inc. subsidiary KTG to proceed with a $300 million expansion that would add 100 jobs at its Memphis mill. In this 2005 file photo, a worker moves giant rolls of uncut paper around the plant at KTG USA.

They hit the shelves this month: Wal-Mart’s reformulated, store-brand paper towels in a package bearing a prominent red, white and blue graphic: “MADE IN USA.’’

More specifically, all White Cloud Ultra paper towels are made in Memphis. Production started last month of a “New! Stronger & More Absorbent!’’ product.

Kruger Products is supporting Wal-Mart’s 10-year, $250 billion campaign to stock more U.S.-made products. Kruger is transferring production of the paper towels from a company plant in Quebec, Canada, to its monster-sized plant just south of the Wolf River in North Memphis, 400 Mahannah.

Initially, the gesture seems relatively modest. Wal-Mart will buy $5 million worth of the paper towels a year from Kruger, said Nadia Durasamy, director of marketing for Kruger Products USA.

But considering that Wal-Mart’s store brand paper towels — only Wal-Mart sells White Cloud — now claim only 1 percent of Wal-Mart’s shelf space, the potential for growth is high.

Same is true for Kruger’s Memphis mill that just three years ago completed a $350 million expansion and upgrade. Kruger officials indicate that their Memphis plant could be expanded yet again.

Shifting the production of White Cloud paper towels from Canada to Memphis helps Kruger use the capacity of the newer machinery installed three years ago.

While the move did not add jobs to the mill, the added production provides more work hours for existing employees by keeping the machinery running for more shifts.

“Because we were able to fill that machine we can now make further investment and fill other machines,’’ Durasamy said.

Meanwhile, Kruger would love to triple its sales of the White Cloud paper towels to Wal-Mart.

“Going from 1 to 3 percent would be a really big jump for us,’’ Durasamy said.

“Now you are from $5 million to $15 million (in sales volume). Doesn’t sound like a lot, and it’s not for Wal-Mart. But in terms of volume that the Memphis mill would be producing, it’s a lot.’’

Paper towels are just one of three types of paper products Kruger’s Memphis plant makes from pulpwood shipped in by truck and train. The mill also produces facial tissues and toilet paper — Kruger prefers ‘‘bathroom tissue.’’ Toilet paper comprises 80 percent of the production in the 1.5 million-square-foot facility.

Kruger Memphis ranks No. 1 in Memphis for the amount of manufacturing space under a roof. The facility on 80-plus acres is so vast that maintenance crews pedal around inside on large tricycles and managers drive electric carts, stopping at every blind intersection to beep their horns.

Massive “parent rolls’’ of white paper stand on end, waiting to be converted into 200 to 600 cases of toilet paper.

In a photograph lacking any reference object for scale, the rolls might look like typical household toilet paper. Only if something like a forklift or an employee is photographed next to them would one realize the rolls weigh 3,000 to 5,000 pounds each. About 200 to 600 cases of toilet paper can be sliced out of each of them.

In addition to Wal-Mart, the mill makes private-label products sold at other national chain stores. Kruger Memphis also makes Cashmere, the top-selling brand of toilet paper in Canada, said Fred Ceruti, the plant’s general manager.

Kruger acquired the paper mill from Kimberly-Clark in 2002, and completed a $40 million expansion before cutting the ribbon in 2013 on the $350 million addition. With the added space and new printing and converting equipment, employment rose from 294 jobs before the expansion to 408 now.

The shift from Canada to Memphis is a second example of how Wal-Mart’s 10-year, $250 billion campaign to buy more U.S.-made products is boosting Memphis employment.

Last year, a new Wal-Mart contract allowed Impact Innovations here to buy new machinery, hire 18 more people and print 10 million rolls of Christmas gift wrap for the giant retailer instead of importing it from China.

Ceruti, the Kruger Memphis general manager, takes such pride in his company’s made-in-Memphis products that whenever he shops at Wal-Mart he always goes to the aisle of tissue products and points out a fact to any fellow shopper nearby.

“I’ll pick up something (made by Kruger) and say, ‘You know that’s made in Memphis, that’s made here.’

“They’ll say, ‘No it’s not.’ I say, yeah, that’s made right here.’’

“They’ll say, “How do you know that?’

“And I’ll say, ‘Well, I happen to be the general manager here. I know it’s made here.'’’

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